Evolution Of State-owned Equity Structure--a Study On The Mismatch And Reconfiguration Of Capital Rights

China has the world's most large state-owned capital, whose earnings related to universal benefits of residents. The lower capital gains is a major obstacle to the quality improvement of national economy. This paper studies the use of normative and empirical research by combining methods of qualitative and quantitative,and comparative analysis of cost-benefit exploring the underlying causes of the lower capital gains to the state-owned capital.Using EVA analysis to evaluate the performance of state-owned capital found that over years,the Economic Value Added (EVA)has been negative produced by state-owned capital,not only the overall state-owned enterprises, but the most outstanding central enterprises as well, indicating that executives not only failed to create wealth to the shareholder, also damage to the Interests of shareholder. Analyzing the DuPont model shows that the primary cause of hurting shareholders is low turnover of state-owned enterprises, followed by low profit margins. High debt of state-owned enterprises, not a burden but a positive contribution to corporate performance. Low asset turnover reflect management's lazy governance. low profit margins shows that the rate of sales costs, especially high cost of managements and the situation of multi-level agent.Further analysis with use of principal-agent theory, state theory, Pecking Order theory shows that the main reason of providing low profits by lazy and greedy managers as the long-term agents of state-owned capital, is that the mismatch of the power and state-owned capital, the shareholders are unable to exercise their own right,which controlling by the managers. The mismatch of power and state-owned capital,comes from the virtual generalization of ownership of state-owned shareholders. " One Big Share Alone " of the shares structure and operating system of no distintion between the governments and enterprises strengthens the manager right and weakening shareholder rights. Mismatch of the power and capital, managers have the opportunity to grab the interests of creditors and the interests of small shareholders through preference of stock financing , and grab the interests of including state-owned and other stakeholders through a high-post consumption and high salaries. The main reason for the low state-owned capital gains is that the lazy managers bad performance and the interests of shareholders exploited by some of the greedy managers.The mismatch of state-owned capital right may lead to long-term inefficient, high-cost agent normalized, capital right administralized and executive power capitalized, as well as sharpening unfair distribution in whole society.To improve the state-owned capital gains, the right of capital must be reset, and the shareholder controlling should be strengthened to resume the relationship between shareholders and managers.State-owned capitals, which characterized by both profit-driven and public-good, as well as a high degree of generalization and imaginary of the property rights. To adapt to the three major characteristics of state-owned capital, the measures should be taken is that transfering common shares of state-owned to preferred stock. The shareholders of state-owned should Sacrifice controlling rights for the rights of Priority in the allocation of revenues, allowing non-state-owned major shareholder real incentive to exercise control over the operations of companies. Analysis showed that the transfer of state-owned shares to preferred stock, the non-state capital with controlling right could ensure the maximizing the value of state-owned capital as a "free riders" in the pursuit of their own benefits. Thus the interests of social capital could be maximized. To prevent the "right swap", "golden shares" should be issued in the transfering of common shares to the Preferred.